Question

Hunter Company reported a net loss of $12,000 for the year ended December 31, 2017. During the year, accounts receivable decreased $28,000, inventory increased $20,000, accounts payable increased by $30,000, and depreciation expense of $24,000 was recorded. During 2017, operating activities:
1. used net cash of $10,000. used net cash of $25,000.
b. provided net cash of $25,000. provided net cash of $10,000.

Answer 1

Answer:

$50,000

Explanation:

The preparation of the operating activities under the indirect method is shown below:

Cash flows from operating activities

Net loss          -$12,000

Add: Depreciation expense  $24,000

Add: Decrease in account receivable $28,000

Less: Increase in inventory -$20,000

Add: Increase in account payable $30,000

Cash provided from operating activities  $50,000

The options are incorrect. The right answer is shown above